Oculus VR founder tells Stuff: We're going to sell Rift at cost price

Still shaking from the pant-ruining terror of playing Alien Isolation on the Oculus Rift, we sat down with Oculus founder, Palmer Luckey, to discuss what's next for the field-leading VR company. And while Luckey remained tight-lipped on a release date for Oculus as a finished consumer gadget, he did reveal that Oculus doesn't plan to make any money from selling it.

"Whatever it costs us to make, that is what we’re going to sell it for"

"The next six months is going to be crazy," says Oculus's 21-year-old founder. "We’ve got a lot of stuff going on." Read what you like into that, speculation fans, but Luckey and his team are definitely working flat-out to create the consumer version of their already revolutionary virtual reality headset. "The first consumer version will be a lot better than DK2 [the current developer kit] - a lot better. There’s a lot of unannounced things we can’t talk about, but it’s going to be a lot smaller, a lot lighter, cheaper, wider field of view, higher resolution and higher framerate. DK2 wasn’t designed to be the thinnest or lightest thing we could make, or the cheapest for that matter: it was meant to be something we could get out quickly, that did all the functions we needed it to, very reliably. But it is a developer tool. We reused a lot of the same parts for DK2 that we used for DK1, because that allowed us to move a lot faster. But for the consumer version we’re making every piece from the ground up. There isn’t a single piece from DK1 or DK2 that will go into it, so we’re able to design it from the beginning to be a perfectly integrated, minimal piece of hardware."

This sounds expensive - we must be looking at a rather low margin on this thing. "We’re going to be selling it at cost," Luckey tells us. "Whatever it costs us to make, that is what we’re going to sell it for. That’s one of the things the Facebook deal has allowed us to do: because we already have these resources behind us, we don’t have to worry about making money from our customers right away. If we were running purely on our own and trying to make money just from hardware, we would need to make enough profit from each unit to pay for running the company for several years, until we launched the next one."

[And that, folks, is why you only get a new console once every 5-7 years.]

"With Facebook, now we have that financial backing, we have the confidence that we’re going to be around for a long time and we can afford to make the right decisions to make VR happen in a big way."

morpheus good, Antvr bad

Oculus is also spending money on multiple first-party games studios: “we’re going to have teams based in Dallas, Irvine, Seattle and Menlo Park. A lot of people. And we’re going to be publishing other studios’ content. So when will we see the first demos from Oculus’s home-grown studios? “You’ll definitely see some demos from our studios by next E3,” Luckey tells us.

One of the signs you’re doing something right is that everyone starts copying you, and this is especially true of Oculus. Surprisingly, Luckey is pleased that other companies are getting into VR.

"It’s good to see other people in the VR market. It lets people know that VR isn’t just this thing that one crazy company believes in, it’s something that a lot of companies, even really big companies, believe in," he says. But while he's happy to see Sony joining in, Luckey isn't so happy about lower-end companies. “Sony’s hardware isn’t up to where it needs to be, and neither is ours, but even though neither of us have a consumer product yet, we understand the problems and we know what we need to do to fix them. Other companies either don’t understand the problems, or choose to ignore them, and I think that’s dangerous. I don’t want people to try VR and think it’s garbage. It’s not hard to release a consumer product - people release garbage consumer products all the time. ANTVR - they’re saying Oculus doesn’t have a consumer product yet, but out dev kit better than what they’re selling to consumers. Just saying it’s for consumers doesn’t make it a good product."

Oculus glass

Does he see it replacing people’s TVs? "Yes. I think that VR has the capability to replace almost all the screens we use on a daily basis. Even phones - let’s go way into the future and imagine it’s built into something that just looks like a normal pair of glasses. Why would you have a phone instead of that?"

"I really don’t care if people want it sooner"

Since the moment John Carmack strapped on a prototype Rift at E3 two years ago, there have been millions of impatient gamers who want to buy one, right now. The temptation to rush it out must be enormous. "Sure," says Luckey with the kind of laugh only a 21-year-old millionaire can muster, "but too bad! What’s more important - getting them something a little earlier, or making virtual reality stick and hold this time, instead of falling over. I just really don’t care if people want it sooner, because we have to do it right, not soon."